Although there could be some global disruptions to demand and supply, India’s paper industry, which is strongly based on the domestic market, is expected to witness a good growth next fiscal, according to Indian Pulp and Paper Technical Association (IPPTA) secretary general MK Goyal.

The size of the industry is currently estimated to be around ₹80,000 crore. It is estimated that the total paper production in the country is more than 25 million tonnes per annum.

The country’s paper industry witnessed a good growth during the first sixth months of the current financial year. However, the second half of FY24 has not been good for the industry because paper prices have gone through a lot of corrections due to low global demands.

“If the size of the country’s paper industry, in terms of value, was to be calculated six months back, the value would have been much higher. Paper prices have gone through a lot of corrections. As there is a European economy glut, our prices have softened now. The prices of writing and printing paper, graph paper and packaging boards have dropped by 30 per cent on an average compared to six month ago due to the softening of demand in global markets,” Goyal told businessline.

Goyal said the demand in the domestic market is intact by and large. “However, to some extent, packaging boards, which are used for exporting high-end medicines, have been affected. But it is recovering slowly. Kraft paper segment is impacted now due to lower export demands,” he pointed out.

The industry generally exports around 7-8 per cent of its total production.

Asked about the outlook for the next financial year, Goyal said, “We think the next financial year will be a good year for our paper industry. The possibility of global economic downturn is a concern. Our domestic market is intact. But if the global economic recession takes place, the segments which depend on export would surely take some hit. But, it could be minor.”

Presently, there are more than 850 paper mills functioning all over the country, producing various types of papers such as printing and writing, packaging, tissue, newsprint, etc. The industry provides direct employment to about 0.5 million people and indirectly to around 1.5 million people.

IPPTA has urged the industry players to take steps to take sustainable growth path which will secure the future energy and environment. In the area of energy conservation, the association has urged the players to shift from traditional source of energy to renewable source of energy, adaptation of energy efficient technologies, undertaking of energy audits, setting target for carbon reductions and investing in R&D.